Justice Department toughens fight against corporate crime and will prosecute more individuals

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By Chris Prentice

The U.S. Department of Justice on Thursday introduced policy changes to eliminate repeated corporate misconduct and prioritize prosecutions against individuals, signaling a shift to a tougher government stance on white-collar crime.

Deputy Attorney General Lisa Monaco said the department’s top priority for corporate crimes is to prosecute people who commit and profit from wrongdoing.

“Responsibility begins with the individuals responsible for criminal behavior,” Monaco, No.2 in the Justice Department, told an industry conference.

When evaluating sanctions and resolutions, Monaco said the department would take a broader view of a company’s misconduct, be ready to install third-party monitors, and have further requests for cooperation.

His remarks signaled a change in the department’s approach to white-collar crime under Democratic President Joe Biden after former Republican President Donald Trump’s administration took a much more pro-business stance.

White-collar prosecutions have fallen to an all-time high under the Trump administration, according to data compiled by Syracuse University. Even before that, the Justice Department was criticized for failing to hold Wall Street leaders accountable for the 2007-2009 financial crisis.

The department will require companies to name all of those involved in the misconduct in order to receive credit for cooperation, contrary to the previous policy under which companies provided the names of people considered to have been “substantially involved” , Monaco said.

The department will also require prosecutors to take into account a company’s full criminal, civil and regulatory record when considering how to resolve a wrongdoing investigation, Monaco said. Previously, the department focused primarily on similar types of misconduct when assessing a settlement.

Monaco said the department is considering whether it is appropriate to enter into agreements with companies that postpone or waive criminal charges in exchange for fines and promises of better behavior when the company is a repeat offender.

Between 10% and 20% of all major corporate criminal resolutions involve repeat offenders, Monaco said.

The Justice Department recently informed two companies that they were in breach of such agreements.

The department will also reverse its abandonment of the requirement for company monitors, Monaco said. The use of these independent firms, which tend to be costly for businesses, fell out of favor under the Trump administration.

He will also integrate a new team of FBI agents within the department’s criminal fraud section, which is charged with prosecuting economic crimes, Monaco added.

The policy changes are “steps in the right direction,” said Rick Claypool of the watchdog group Public Citizen. Claypool said the Justice Department “has a hill to climb” to get back to how it handled white-collar crime under former Democratic President Barack Obama, “let alone try to shift to an agenda. lawsuits that companies genuinely fear “.

Reuters


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